1. Dina Umali-Deininger Lead Agriculture Economist, World Bank
Revitalizing Agriculture and Rural Development to Sustain Growth and Reduce Poverty
Dina Umali-Deininger
Lead Agriculture Economist, World Bank

2. Most of South Asia’s poor are in rural areas

3. Most of rural people and poor depend on agriculture
India: Low labor productivity contributes to rural poverty
Agriculture a major employer in South Asia, but contribution to economy is shrinking

4. New opportunities: A “new agriculture” with dynamic demand
Sri Lanka
India
Rising consumer demand for high
value crops and animal products
Rising high value crops
and animal products in exports

5. Challenges in Agriculture in South Asia
Slow down in agricultural productivity growth
< 3% per year, in context high rural poverty rate
Climate change: droughts, cyclones, floods
Leading to rising rural-urban & regional income disparities
Increasing land and water scarcity
Land degradation: erosion, over-extraction of groundwater, waterlogging
New demands on agriculture:
strict sanitary and phyto-sanitary standards
Health epidemics linked to agriculture
Avian flu, mad-cow disease

6. India: Slowdown in yield growth and large yield gaps in many states
Slow down in progress in yields for 10 major crops
With large gaps between potential and actual yields ( )
Wheat: 6% (Punjab) to 84% (M.P.)
Rice: Over 100% in Bihar and UP
Maize: 7% (Gujarat) to 300% (Assam)
Soybean: 7% (Rajasthan) to 185% (Karnataka)
Sugarcane: 16% (A.P.) to 167% (M.P.)
Need invest more in research
Need invest more in extension

7. Strategic priorities for Agriculture
Ag Technology
Water use
Improving agric productivity and competitiveness
Enabling policy environment
Markets
INCLUSIVE GROWTH & POVERTY REDUCTION
Income generation
Rural Livelihood Development
Sustainable Natural Resource Management
Social empowerment
Land
Water
Skills development

8. A. Improving agricultural productivity & competitiveness
1. Rationalizing role of government
Promoting more effective public expenditures
Towards productivity enhancing investments: research, extension, irrigation, roads, electricity, markets, education
Improving policy and regulatory environment
Promoting PPP
Public Expenditures India
Subsidies 75%
Public investments 25%

9. A. Improving agricultural productivity & competitiveness
2. Technology, innovation & markets
Effective agricultural research and extension systems
increase agricultural productivity and enable diversification to high value products (F&V, livestock, fisheries) by small farmers
Link farmers to market,
Promote value addition and value chain development
Invest in rural infrastructure: roads, electrification, markets
Foster producer associations, agribusiness development services
3. Water/Irrigation management
Better irrigation service delivery
Farmer participation in management thru WUAs, pricing, water regulatory authority
Reduce losses
better O&M of irrigation system, technology—drip irrigation

10. B.Sustainable Natural Resource Use
Watershed Management
Participatory and holistic approach to soil and water conservation at watershed level
Land
Reforming of land ownership and tenancy policies
Improving land administration systems

11. C. Rural Livelihood Development
Promote growth of Rural Non-farm economy
Promote employment and investment opportunities
improve rural investment climate, public-private partnerships
Develop skills of rural people for employment in RNF
Education, vocational training
Help labor out of agriculture: requires massive investment in human capital

12. Challenges to making this happen
Government failures
Lack of financial resources
Inadequate capacity to implement programs effectively
Political economy: vested interests against reforms
Market failures: high costs of working with small/marginal farmers
Lack of awareness/knowledge of new approaches

13. Conclusion
Agricultural growth is critical to promoting rural growth and to reducing poverty in rural areas
Making this a reality requires commitment of all stakeholders—government, farmers, private sector, civil society